Simple Guide to Car Insurance
Car insurance is a financial product that includes coverage in the case of accident of your car and you as a driver. It can also include coverage for passengers. Car insurance is a product you buy, but if you are lucky will never need it. Car insurance differs from one type to another in terms of the protection it offers you. Its after the fact type of insurance in the case of a damage and it helps to minimize the damage of event of an accident. Some auto insurance policies like comprehensive insurance and collision insurance are tied to a car and the others like non-owner car insurance or liability are tied to you as a driver. Everyone is in a need of some type of the insurance. Most of US states require to have some extent of car insurance and even not, auto insurance is worth having.
Liability is a sum you owe someone, because you cause him harm or damage by your fault, so liability insurance covers the others included in a car accident. For instance if you hit the bicyclist with your car and cause him harm, his medical expenses could reach hundreds of thousands of dollars. Without the right liability coverage you would be in a possition to have to sell your retirement savings or your house to pay the medical bills.As much as paying for car insurance can be anoying, it could save you from bankruptcy or selling your own house, because of your mistake on the road.
How Car insurance works?
In principle car insurance is an agreement or contract between you and your auto insurance company. You agree to pay them fee , called premium. This fee can be paid on monthly, yearly or twice a year, depending on contract, in exchange you get car insurance policy. It is an agreement in which events the car insurance company will give you coverage. Having a right car insurance policy, you wont have to come up with funds to repair the car after a car crash, car insurance company will cover the costs. You have to alert your car insurance company after the event – this is called a claim – and car insurance company will pay for car repair or vehicle replacement, but up to the limits defined in policy. Car insurance comapny will also spell out a deductible which is the amount you have to pay when making a claim. For instance, if your deductible is 1000 USD and damage 3000 USD, You will have to prvide 1000 when making a claim.
How much auto insurance you need?
There is not an universal answer to that. Its up to you, you can have car insurance policy with minimal coverage required by the state you live, or extended premiums and full insurance. You can adjust the type of insurance to your personal finance needs and budget. When you are financing or leasing your car, your lender could have his own requirements what kind of minimum coverage you need. Auto insurance policies are adjustable, according to the funds you posess, income you get and the policy you think you need. You can also choose higher deductible to lower your annual insurance rate. Also bear in mind that if you posses minimum requirement insurance – limited insurance, you wont be able to get full coverage in the case of collision or theft and actually what you save on premiums, you will have to pay from your own savings, so all in all cheap car insurance is not always a good deal.